Article from the Financial Times weekend money supplement.

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Business challenges

Many former inmates find it difficult to raise funds for a start-up company but help is available, says Hugo Greenhalgh

When he was just 21, Duane Jackson was handed a 10-year prison sentence for drug smuggling. It could have been a lot worse. He was caught in Atlanta in the US with 6,500 ecstasy tablets and faced a 25-year sentence and a million-dollar fine. However, the UK authorities needed him back in the country as part of a wider investigation into drug trafficking, and Jackson eventually served two-and-a-half years.

He left prison in 2002 with a criminal record and “a big, black hole on my CV”, he says. “There was a lot of pressure to return to crime – it would have been easy to do that.”

But, with a baby on the way at the time, Jackson was desperate not to become like the men he had seen in prison: facing a long stretch inside with only a photograph pinned to the wall to remind them of their children.

He had picked up computing skills when he was younger – having been left with a ZX Spectrum home computer and a manual at age 15, and told to get on with it.

“With hindsight, it was the best thing that could have happened to me,” he says.
Jackson had also taught IT skills while in prison. So, once he was released, he decided to start a one-man web development business, which was easier said than done.

All of the banks said no when he approached them, although they did – he laughs, remembering it was 2003 – offer him a mortgage. But he remembered that someone from the Prince’s Trust had spoken at the prison about the charity’s work , so Jackson turned to the trust for help. “They made me jump through a lot of hoops to validate the business plan,” he says approvingly. The trust chipped in £4,000. Of this, £1,500 was a grant and the rest a low interest loan. “A condition of the funding,” he explains, “was a workshop with them – at the bare minimum – and that gave me a great grounding in time management and bookkeeping, and generally gave me the foundation of how to run a business.” In 2003, Jackson launched KashFlow Software, an accounting software provider, which is now chaired by Lord Young of Graffham , the former Conservative trade secretary and enterprise tsar.

Jackson’s story is typical of many who leave prison and wish to start their own businesses

Not only will they face problems raising funding, but simpler hurdles – such as opening a bank account or obtaining a lease from a landlord who requires references – can also prove hard to overcome for someone with a criminal record.

In May, the government published ” Making Prisons Work: Skills for Rehabilitation “, a review looking into how to “break the cycle of reoffending” by getting ex-offenders on the employment track. It reiterated the government’s commitment to several initiatives, including a focus on relevant skills, supporting more work opportunities in prison, and establishing stronger links with potential employers before the release date.

And the point, stresses Juliet Hope, chief executive of Startup – which helps ex-offenders become self-employed – is that promoting enterprise can be an effective way to combat recidivism. Startup worked with 240 female ex-offenders over 12 months to April this year, helping 60 of them to launch their own businesses. So far, none have reoffended. “Being self-employed is giving people their lives back,” Hope explains, “as well as ensuring they do not reoffend.”

Paul Brown, a director at the Prince’s Trust, agrees. Since it launched its enterprise programme in 1983, his organisation has helped 77,000 young people from disadvantaged backgrounds – with and without criminal records – set up in business. He says the trust actively targets young offenders. “We believe everybody deserves a second chance,” he explains. Sixty-eight per cent of young people who have gone through the Prince’s Trust Enterprise Programme have gone on to launch their own companies – with an additional 34 per cent finding jobs. “One in five young people is currently unemployed,” Brown continues, “and young people with a conviction are right at the back of the employment queue. So, starting your own business is becoming more and more of a viable option.”

This is why Startup is keen for the government to adopt its approach to combating recidivism. “We hope that we would be one of the projects that could be taken to a bigger scale across the country,” says Hope.

For people like Duane Jackson, these sorts of schemes are invaluable. Faced with rejection from the high-street banks when he came clean about his criminal record, he was reduced to lying on the forms to gain a £25,000 loan from his bank using the small firms loan guarantee scheme. “To a degree, you have no choice [but to lie on the forms],” he says.

“A good friend of mine, who is very capable but has a criminal record, has been turned down for job after job – and was told recently that he would have got the job but for the record.”
Having been in business for almost eight years, Jackson’s personal circumstances have changed, and he is now attracting interest from private equity firms.
“When you’re already in business, it is much more of a meritocracy,” he says. “People are much more interested in whether you can do the job or not, rather than your background.”

The Financial Times Limited (AAIW/EIW)

Article from Express.co.uk.

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A NEW Dragons’ Den-style initiative for former female convicts has been so successful none has gone back behind bars.

By Tracey Boles

The Startupnow For Women project provides business advice, a mentor and modest funding for equipment and marketing.

Candidates are given just 15 minutes to pitch their idea to a panel.

Chief executive Juliet Hope said: “In the first eight months of delivering the project, we have advised 164 women in, or recently released from, prison; 93 of these have worked with a Startupnow adviser to produce a viable business plan and, so far, 35 have gone on to set up their own business.

“The reconviction rate in the project, so far, is zero. The results have exceeded our expectations.”

Consistency of support and good advice accounts for its success, she said.

“The Dragons’ Den-style pitch helps them focus on ideas and put them forward.

“If the women were to re-offend, we would give all the money back.”

The initiative is expected to be introduced to men’s prisons next year. Businesses that have got off the ground under the wing of the charity include a hairdresser, cake-baker, a photographer, event management, a speciality cook and a fitness trainer.

The grants, offered by the City of London Corporation, are for up to £2,500.

Clare Thomas, chief grants officer, said: “We are helping women ex-offenders get back on their feet and support themselves by setting up thriving businesses, in so doing, preventing them from re-offending.

“Running your own business is transformational but you need skills and help to get there. That’s why we fund Startupnow.” Those helped include a 55-year-old woman who committed her first offence when she was 17 and has had more than 20 convictions.

She was released in 2008, and in 2010 she met the charity’s mentors who helped her fulfil her ambition to become a beauty therapist, setting up the business and supporting her training.

Another was a 36-year-old graduate and qualified photographer who suffered post-natal depression after the birth of her first child.

This led to drug abuse and her conviction for assault, theft and driving without insurance.

She was introduced to a Startupnow adviser and put together a business plan. She bought a digital camera and even went on a make-up course so that she could offer “makeover” portraits.

Another woman, a mother of four with a nine-month-old baby, received five years for a drugs- related offence and served two and a half. The charity bought her equipment to set up a small cleaning business and helped her develop marketing materials and get insurance cover.

Startup has been awarded £288,238 by the Big Lottery Fund towards its new Startupnow for Women project.   This grant means Startup can continue to reduce re-offending by giving women who have been in prison the opportunity to become self-employed. Over a year, 240 women will have access to personal and business advice with at least 60 going on to set up their own business.

Since 2006 Startup has given over 500 male and female ex-offenders business advice and mentoring with 105 going on to successfully launch a business.  Businesses started include gardening, personal training, hairdressing, web design and even a Buddy Holly tribute act!  Startup works with a wide range of selected partners to deliver its results.

Startup’s simple but unique approach of offering individually tailored business advice, covering basic start up business costs and mentoring for up to two years has resulted in a reoffending rate of less than 5%, versus the 65% national average.

So far, Startup has been funded by foundations and private support. This grant enables Startup to expand its operations; we hope it will also persuade the new government to back a major expansion of the men’s programme, which saves £9 of taxpayer’s money for every £1 invested.

Juliet Hope, CEO of Start Up, added “It’s wonderful that the Big Lottery understands the value of the work that we are doing and is supporting the Startupnow for Women project so generously “

The Big Lottery Fund distributes half of the National Lottery good cause funding across the UK.  The Fund aims to enable others to make real improvements to communities and the lives of people most in need.

For Further information please contact: Juliet Hope: 07918680011 or jhope@startupnow.org.uk